Tobacco Settlement Money: Up in Smoke?

Oct. 2, 2002 -- Antismoking activists once had high hopes that the landmark $246 billion tobacco settlement would have a major impact on smoking, but a new study from Yale shows that almost none of the money spent so far has been used for prevention and cessation programs.

Approximately $32 billion has been paid out since the settlement was reached in 1998, with much of the money being used to pay the bills in a growing number of states with budget shortfalls.

"This was a once-in-a-lifetime opportunity for governors and state legislators to address the leading cause of preventable death in the United States," says Bill Core, executive vice president for Campaign for Tobacco-Free Kids. "I think it is fair to say that even prior to the economic downturn most states were not even close to living up to the promises that were made."

Payments from the settlement are being made over 25 years, but 15 states already have sold the rights to some or all future payments in an effort to balance current budgets.

The CDC recommends that states spend from $5 to $15 per person -- or roughly 20% of the settlement money -- on tobacco control programs. But the Yale University researchers found that most states aren't even spending half that amount. Only Maine, Mississippi, Hawaii, Massachusetts, Arizona, and Indiana spent more than the CDC recommendations on tobacco programs last year.

By comparing state tobacco control program expenditures with settlement payments for 2001, lead author Cary Gross, MD, and colleagues conclude that less than 6% of the settlement funds were directed to tobacco programs. The findings are published in the latest issue of The New England Journal of Medicine.

According to Core, only about 4% of the settlement monies paid out for fiscal year 2002 will be spent on tobacco prevention and cessation programs, compared with a high of 9% in 1999.

"Even at the high end, that was only about half of what the CDC has recommended," he tells WebMD.

Though the average state received approximately $28 per person from the settlement in 2001, only about $3.50 per person was spent on tobacco control programs. The states with the most smokers tended to spend less on smoking programs than those with the fewest smokers. And four of the six states that grow 90% of the nation's tobacco -- North Carolina, South Carolina, Tennessee, and Kentucky -- spent almost none of the settlement money on smoking programs.